NGOs urge KfW to stop funding biomass heating in Serbia

Date: July 29^th 2024

Topic: Electricity , Energy policy , Economy , Ecology , Heating , En.vision , Energy Efficiency

Environmental advocacy groups on Monday urged German bank KfW to end financing for wood biomass energy in Serbia due to concerns over forest degradation and the risk of the country becoming dependent on high-carbon energy.

KfW is the main financier of a controversial EUR 32m programme for Development of a Biomass Market in Serbia, which was launched in 2017.

The programme has already led to the construction of combined heat and power plants in four Serbian municipalities, each featuring a wood boiler and a larger fossil fuel boiler.

In May, KfW approved two new contracts for a total of EUR 9.9m in loans for six more wood biomass plants in six further municipalities. The full details of the agreements for the second phase remain undisclosed, 41 NGOs led by CEE Bankwatch Network said.

“The planned investment threatens Serbia’s forests, affecting the diverse wildlife and ecosystems they support, and exacerbates the existing high levels of air pollution,” it noted, adding that illegal logging is widespread in Serbia, and that there is no adequate legal and administrative framework for protecting forests and the mammals, birds and other life forms that depend on them.

A burning issue

“Not enough wood can be harvested to cover Serbia’s plans for biomass district heating without causing serious harm to the country’s forests,” Natasa Kovacevic, the campaigner for district heating sector decarbonisation at CEE Bankwatch Network was cited as saying. “Pouring further money into burning trees for heat means feeding illegal logging activities, exacerbating poor air quality and fueling the climate crisis. It also crowds out funding urgently needed for more sustainable energy solutions.”

The NGO’s reiterated that 500 scientists warned in an open letter in 2021 that additional woodharvest for bioenergy “will increase warming for decades to centuries. That is true even when the wood replaces coal, oil or natural gas. Furthermore, part of that ‘climate finance’ has been used to build new fossil fuel boilers next to wood-fired ones”.